Tableau's Plunge Is a Cautionary Tale for Growth-Chasing Tech Investors

Tougher competition from larger peers appears to be weighing on the analytics software firm's sales. That's a story many former enterprise high-flyers can relate to.

Less than 18 months ago, Tableau Software (DATA) was seen as a company that could do no wrong, a fast-growing juggernaut that was at the forefront of a software wave that promised to make advanced analytics tools far more accessible and widely used in the corporate world.

Today, Tableau's story doesn't look so unblemished, and the way that it has changed should serve as a cautionary tale for investing in richly-valued, enterprise tech names in hot markets that larger peers have begun to take notice of.

On its earnings call, the company guided for Q4 revenue of $225 million to $235 million and EPS of $0.09 to $0.16, below consensus estimates of $250.1 million and $0.20. It also set preliminary 2017 revenue growth guidance of just 0% to 10%, below a consensus for 22.4% growth. Tableau cautions the guidance assumes its mix of "ratable" license bookings, for which license revenue isn't fully recognized up-front, will double in 2017.